Environment

We acknowledge the need of society for us to conduct our business in a way that protects the natural beauty of the environment and preserves the capacity of the earth to meet the needs of present and future generations.

Seven Generations is committed to protecting the natural beauty of the environment and preserving its capacity for current and future generations. While we recognize that our activity and operations impact the air, water, land and natural life, we believe it is not only vital, but critical to work with all our stakeholders to reduce and minimize our environmental impacts. Our Kakwa River Project, located 100 kilometres south of Grande Prairie and straddling Highway 40, is a multi-use area where families camp, picnic, fish and use a variety of recreational facilities. Several industries operate in this region of Alberta – forestry, farming, livestock, oil and natural gas production, electricity generation, coal mining and highway and rail transportation.

We believe caring for the environment requires long-term planning with a focus on responsible development that will not only meet, but will exceed, regulatory requirements. Our development of the Kakwa River Project includes an overall plan to minimize and reduce our environmental footprint by employing multi-well pad sites and centralized processing facilities. To understand the environment, we undertake baseline studies. We plan and manage our water use. Technological advancements have led to an increase in the lateral length of our wellbores underneath the surface. This has reduced the number of wells required to harvest the resources and has reduced the amount of disturbed surface area. We strive for continuous improvement by employing innovative practices and technology that help conserve the environment. We consult regularly and in advance of conducting work; we seek input from our stakeholders in the region, including the First Nations whose traditional lands overlap our Kakwa River Project land.

Our Kakwa River Project is very new. Our major investments and developments have been underway for just the past few years. Given that, we are at the early stages of evaluating our impact on the environment, but we are also making significant and ongoing progress. For example, in the past few years, we have reduced our flaring for each well by about 70 percent. Our Super Pad designs, with about 30 wells per pad, allow us to recover the resource from four square miles. That means our pads occupy less than one percent of that surface area. We are continually working to reduce our impact. We’ve made good progress, but the task is ongoing. Here are a few of the initiatives in how we strive to work in a sustainable manner.

Land

Environmental Baseline Study

We are conducting an environmental baseline study on our Kakwa River Project land to assess the natural environment, groundwater, surface water, plants, trees, wildlife and their habitat. Our first step was a preliminary assessment in 2013, and we are conducting field work, with a strong focus on water sources and resources.

Super Pads Keep Land Impacts Low

How we use the land is of prime importance. Efficient access to surface land is essential for natural gas development, and we are continually looking for ways to minimize our footprint. Across North America, concentrated oil and natural gas drilling has often employed four wells per pad, with each well extending about 1,600 meters horizontally through the reservoir. But we are going well beyond that, drilling longer wells that minimize the surface disturbance and increase resource recovery.

Each Super Pad is designed to host more than 30 wells, and our most recent wells extend about 3,000 metres horizontally. With so many very long wells, surface land requirements are reduced by about 76 percent compared to the typical four-well pads. Each Super Pad covers about 22 acres (9 hectares), and can harvest resources from under four square miles, or 2,560 acres (1,036 hectares). That means one Super Pad disturbs less than 1 percent of the surface land to recover the resources located three kilometres below. Once drilling is complete, Super Pads serve as production locations, each containing a small natural gas processing plant.

When the surface impact is so small, the environment benefits – the wildlife and their habitat – remain largely intact. This land-use efficiency saves money, improves project economics and increases the returns for the producer and the province of Alberta.

How Pad Drilling Reduces Surface Impact

Employing Progressive and Incremental Development that Minimizes Land Impact

To fully understand the value of a new hydrocarbon field, companies need to delineate and develop their resources. In delineation, wells are drilled to define the edges of the hydrocarbon pools, and to assess the potential value of the field. Once the field is defined, development can be planned in increments. At Seven Generations, we look to develop resources in increments, moving ahead in stages and impacting just a portion of the surface land within a project area.

Because many unconventional fields are very large, it can take many years to drill and recover the resources, and that allows for drilling and production to occur incrementally, in stages. For example, a company could develop just the eastern section of the field, leaving the rest of their field undisturbed. Development could then unfold on the central section, and reclamation can begin on the drained east section. The final western section could be drilled while the drained central section is reclaimed.

This concept parallels the Great Law of the Iroquois; the source of our name. By only impacting a portion of the field at any given time and slowly moving impacts across the field, we give the natural resources at surface time to replenish and return to their original state prior to the disturbances. This means that the next people who would like to use and enjoy that particular area may do so sooner rather than having to wait for the larger area to be fully developed and reclaimed.

Wildlife

Wildlife Habitat Protection

We are in the early days of learning about the resident wildlife in the Kakwa River Project area, taking an initial focus on bears and caribou. As a starting point, we are tapping into the extensive knowledge and research of the Foothills Research Institute, a well-respected authority on a variety of environmental matters on the eastern slopes of the Rocky Mountains. The Institute, located in Hinton, Alberta and about 250 kilometres south of our operations, has conducted grizzly research since 1999. Its expertise is informing our planning and land management and will help ensure the long-term conservation of the grizzly bear.

Bear Awareness Course

Operating in remote locations that are home to a variety of wildlife means that we need to be on friendly terms with our neighbors. To minimize any disturbance of the resident wildlife caused by our operations, and to reduce our workers’ contact with animals, we provide bear awareness training for staff and contractors. The purpose is to coexist without contact. The best wildlife sightings and engagements are the ones that cause no stress for animals, or humans. Our work with the Foothills Research Institute provides high-quality regional data for our program, giving our students practical lessons and tools to increase their own safety in bear encounters, and provides a better understanding of how bears use and move about on the land where our project is located. We also consult with area First Nations on how we interact with the wildlife so as to keep our disruption for wildlife to a minimum. Beyond educating our workers about bears, plans are underway to expand this training into a 7G-specific wildlife awareness course to include other Alberta species that require protection and habitat conservation.

Wildlife Conservation Education

Any form of development, whether rural or industrial, will have an impact on wildlife, but humans and wildlife are more than capable of co-existing when development is planned sustainably. Minimizing surface impacts helps to preserve wildlife habitat, and educating employees and contractors about local wildlife helps to minimize negative encounters between humans and wildlife. One way that we are educating our employees and contractors is through a joint voluntary wildlife observation and reporting program with Alberta Environment and Parks. We proudly display the above sign at the entrance of our Archie Way Road, which is a controlled access field operations road through the heart of the Kakwa River Project. Our employees and contractors enjoy sighting wildlife along the Archie Way Road, and reporting the populations to conservation authorities.

Water

To produce the natural gas that heats our homes and cooks our meals, we use water in drilling and well completions – hydraulic fracturing. This highly technical resource recovery technique has opened vast new supplies of affordable energy for North America, lowering the price of natural gas, oil and the transportation fuels that we all rely upon. As with all our operations, we are continually looking for ways to safely manage and reduce our water use.

Drilling

In our drilling processes, we use water to lubricate the drill bit and to carry rock cuttings to the surface. The water comes from a variety of highly regulated sources, such as surface run off, rivers and the recycling of water previously used in drilling. Seven Generations is undertaking a comprehensive examination of its water use, looking at a variety of strategies that will help reduce water use and increase recycling.

Well Completions

In our well completions, water is the foundational fluid for our hydraulic fracturing fluids, which are formulated to fit the individual characteristics of a formation, such as temperature, pressure and rock type. To improve the effectiveness of the hydraulic fractures generated by the water, trace amounts of additives are required to perform specific functions. Those fracturing fluid additives help:

make water more slippery so that we can reduce the power required to pump

thicken water so that it can better carry proppant, which is usually sand

protect the casing from corrosion

manage harmful bacteria that might flourish in the warm petroleum deposit and create unwanted reactions including some that might generate poisonous gases

What’s in the Completions Fluid?

Seven Generations participates in disclosure of the fluids it uses for hydraulic fracturing. This information is available on the industry’s hydraulic fracturing information website – www.fracfocus.ca.

How Many Well Completions per Swimming Pool?

The amount of water used for each completions operation depends on the type of fluid employed. Seven Generations typically uses one of two types of completions fluid. Slickwater completions use mostly water, with some trace additives. Nitrogen-foam completions add nitrogen to the water, which creates a foam. Nitrogen is an inert gas that makes up about 78 percent of our atmosphere. As we assess the effectiveness of our completions using nitrogen foam and slickwater, an important consideration is the amount of water required for each method. Nitrogen foam completions use about one quarter of the water used in a slickwater completion.

Seven Generations sources water from dugouts, which collect runoff water from rainfall, snow melt, ponds and rivers, or by buying it from Grande Prairie and trucking it to well pads. Water use is regulated under the Alberta Water Act and is enforced by Alberta Environment and Parks, which oversees the responsible allocation of water for energy development and ensures good water management practices to support the sustainable use of Alberta’s water resources.

We are committed to the sustainable and responsible use of our water resources and are currently investigating multiple alternative options for our water needs including:

Searching for deep, slightly saline and/or fresh water resources that are largely isolated from the surface water cycle and the biosphere

Treating and re-using flowback water from completions and/or produced water from production wells

Using waste water from other industrial and municipal waste sources such as pulp mill effluent and domestic sewage

Surface and Ground Water Protection

Over the past decade, hydraulic fracturing has attracted a significant degree of public concern, primarily about the perceived risks to groundwater, which is widely used in rural locations for drinking water. Seven Generations shares these concerns, and it employs extensive and proven well construction techniques to ensure that the liquids-rich natural gas that it produces remains contained inside the well casings and pipes that are designed to move it from the reservoir to production facilities and safely to market. Wells are drilled with water, the well bore is lined with steel casing that is cemented in place. To ensure well bore integrity, drillers install multiple layers of steel casing and cement. Instruments monitor pressure in the well and help safeguard all aspects of the drilling process. Drilling practices are extensively regulated by the Alberta Energy Regulator, which applies the knowledge and experience based on the hundreds of thousands of wells that have been drilled in Alberta and Canada. Although there have been many publicized allegations of groundwater contamination by drilling and hydraulic fracturing, a review of regulatory and academic studies show no indication or documented cases of fluids from hydraulic fracturing contaminating groundwater aquifers. Seven Generations continually works to ensure all of its operations are safe for workers, the public and the environment.

Air

In all of our operations we look for ways to reduce our impact on the environment, and that includes our emissions, which are largely a result of vehicle and drilling rig operations, plus the flaring of natural gas and nitrogen during completions operations, and as a safety measure during emergency plant operations. We comply with all regulatory requirements for monitoring and reporting as required by the National Pollutant Release Inventory (NPRI), Dehydrator Engineering and Operations Sheet (DEOS), and greenhouse gas emissions under Alberta’s Specified Gas Emitters Regulation (SGER). Based on 2014 emissions, none of our facilities met the 50,000 tonne carbon dioxide equivalent maximum threshold for reporting under SGER. We have made considerable progress in reducing our emissions in recent years, and we are continuing to research and test new and better ways to operate in future.